• World’s Largest Tour Operator Hanging on by Fingernails
Perhaps the single best reading of the tourism industry in Europe and the Americas was revealed last week came when the Hanover, Germany-based TUI, the largest package tour operator in Europe and the world, announced that its turnover in the second quarter of 2020 had fallen by 98 percent vs. the same period last year. Although the news was not entirely a surprise, the sheer magnitude of the numbers involved illustrated just how severely the coronavirus pandemic had damaged the travel and tourism industry:
—TUI Group revenue evaporated 98 percent to €75 million ($88.7 million) the second quarter of the year, as it reported previously unimaginable Q2 losses of €1.1 billion ($1.3 billion.
—The quarterly result brought TUI’s nine-month loss to €2 billion ($2.37 billion), an increase of €1.8 billion ($2.1 billion) over the same period last year.
—Bookings for summer 2020 are down 81% with average prices tumbling 10%.
—TUI reported that it has sold just 16 percent of its original 2020 capacity, and 57 percent of its adjusted capacity.
—By this time last year it had sold 88 percent of its summer 2019 holidays.
—In a move aimed at cutting costs, TUI said it will look to make ‘permanent and group-wide’ savings of 30 percent.
And to top off all of the reports, the operator reached an agreement with the German government for an extra 1.2 billion euros ($1.4 billion) in aid that could give the government a stake of as much as 9 percent in the tour operator.
• JTB Corporation announced the official integration of Kuoni Global Travel Services and Tumlare Destination Management as a single entity. It is now one brand: Kuoni Tumlare, nearly three years after a joint venture, although both had been trading under their own brands. A company statement said that the integration will enable “a simplified client journey and streamlined processes for increased customer focus and speed of response” Kuoni Tumlare said, adding that it combines “Kuoni’s Swiss heritage, Tumlare’s Scandinavian roots and JTB’s deep history in Japan.” It was some three years ago, in 2017, the JTB Group acquired all shares of Kuoni Travel Investment (Kuoni Global Travel Services) for an undisclosed sum. Founded in 1906, Kuoni had been a major player in the European market for many years. In the past several years, it has strategically been unloading portions of the company: Two years ago, the owner of German operator DER Touristik acquired Kuoni Group’s tour operating businesses.
• Brisbane, Australia-based Flight Centre Travel Group has acquired a business travel management startup—WhereTo—at about the same time it has been laying off hundreds of workers and closing travel agency locations. WhereTo, which is based in San Francisco, uses AI to recommend trip options for business travelers that add in criteria such as traffic conditions, personal preferences and available travel deals. It works with large and small businesses. “We are delighted to come together with WhereTo during this unprecedented time to make a significant advancement in our technology capability, which will allow us to emerge from the crisis in an incredibly powerful way,” said Charlene Leiss, president of Flight Centre Travel Group Americas. Flight Centre said WhereTo will be integrated into products and services in the Corporate Traveler and FCM Travel Solutions brands.
• Overseas Leisure Group is a luxury B2B business operator, has introduced Discover America, a luxury Recreational Vehicle (RV) excursion program, as well as a Responsible Traveler Challenge that encourages travelers to get tested for COVID-19 during the 72 hours before departure. The company offers a $250 credit on each booking if all adults in the party have negative test results. In addition, Overseas is partnering with a company called EntrSafe on a COVID-19 electronic screening app. “We believe that travelers, advisors and operators like us must play a role in keeping destinations safe,” Felix Brambilla, the company’s CEO, told Travel Age West. “The challenge is to provide in-depth reassurance on safety without removing the magic of travel.” Headquartered in Miami, Overseas Leisure Group has 43 offices in 34 countries.
• FTI Group has eliminated jobs and shut down its specialist businesses. The third-largest tour operator in Germany (behind TUI and DER Touristik), FTI is reducing staff costs by 20 percent, reports the German travel trade publication fvw. In addition to cutting jobs in all areas of its operation, the Munich-based operator is closing down the following: LAL Sprachreisen, a language vacation specialist; FTI Cruises; the Fly.de flight sales online operations; and its Touristic 24 call center. year. Since April, the company has been majority-owned by Egyptian hotelier Samih Sawiris, with founder and CEO Dietmar Gunz retaining a minority stake. (For more on Samih Sawiris and Hamed El Chiaty, a wealthy tourism entrepreneur and long-time business partner of TUI, see the article here from an INBOUND article last